In a dry kadai put the coconut gratings and fry just for two to three seconds without changing the white colour.
Add little water (about 1/2 cup) to the sugar and bring to boil. When it starts boiling add milk. Foam like bubbles will form now. Remove from stove and strain it. Put this back in a clean thick bottomed vessel and again allow to boil. When it starts boiling, add coconut gratings and stir well. Keep the stove in medium flame and stir now and then till it blends well and become thick.
Remove and transfer to a greased plate. When it is cooled down, cut it into desired shape.